S&P gives Grafton ‘very strong’ bond rating

By Lisa Redmond

Friday

Apr 24, 2020 at 5:30 PMApr 24, 2020 at 5:30 PM

GRAFTON – Grafton has earned a strong bond rating of SP+1 for short-term borrowing and a long-term bond rating of AA+ from Standard and Poor’s credit rating agency allowing the town to receive more competitive rates and more savings for the taxpayer when the town borrows for big-ticket items.

In its review, S&P states it considers Grafton’s financial practices “good’’ the town’s management as “strong,” and Grafton’s economy as “very strong,’’ according to an April 23 press release issued by Town Administrator Timothy McInerney.

“This rating also underscores the professional standards Grafton adheres to for fiscal management of tax dollars,’’ S&P wrote.

When reached for comment, McInerney said “It’s a really good rating during uncertain times and my entire team is proud to see all our hard work and the town’s financial position recognized by S&P with such positivity and high regard. All in the hopes of securing a favorable interest rate to keep the burden on the taxpayers manageable.’’

What the S&P ratings mean:

SP-1: Strong capacity to pay principal and interest. Very strong capacity to pay debt service is given a plus (+) designation.

AA – Very strong capacity to meet financial commitments

S&P factored into its rating the way the town is coping with possible loss of revenue and reductions in the FY21 town budget due to the COVID-19 health crisis.

“Despite the more difficult economic conditions caused by COVID-19 and the expectation for slightly weaker performance, we believe near-term risks for Grafton’s budgetary performance are contained,” the release states.

S&P notes that “Grafton’s operating performance has been consistent and balanced in recent years” and “the town's strong management team and willingness to make cuts when necessary should allow the town to weather the near-term impact of the recession.”